Britvic — H1 2023 Earnings Presentation
31 slides from Britvic's earnings presentation, May 16, 2023
Slide 1: Interims 2023 presentation
Interims 2023 presentation 16 May 2023
Slide 2: Q&A dial-in details
Q&A dial-in details 1. Conference call details Please join the event 5-10 minutes prior to scheduled start time. If prompted, provide the conference password or event title. Dial in UK-Wide: +44 (0) 33 0551 0200 number(s) UK Toll Free: 0808 109 0700 Password (if prompted) Quote Britvic Interim Resul
Slide 3: Agenda
Agenda Simon Litherland STRATEGIC & OPERATIONAL REVIEW Chief Executive Officer A stronger, more agile Britvic Chris Hancock FINANCIAL REVIEW Chief Strategy Officer An excellent start to the year Simon Litherland LOOKING AHEAD Chief Executive Officer A winning growth strategy 3 Interims 2023 presenta
Slide 4: Strategic & Operational Review
Strategic & Operational Review A stronger, more agile Britvic Simon Litherland CEO
Slide 5: An excellent start to the year
An excellent start to the year • Great progress and momentum across People, Planet and Performance • Successfully managing the challenging inflationary environment • Strong brands winning in a highly resilient category • Making further progress on our strategic priorities • Continued strong returns
Slide 6: Strong delivery across our People, Planet & Performance metrics
Strong delivery across our People, Planet & Performance metrics 2.2x +7.9% +80bps +17.5% adjusted net debt/ Revenue 1 Margin 2 EPS 3 EBITDA £93.4m 4 34% 78 23 Calories Cash returned to x Reduction in Engagement per serve shareholders carbon 5 1. Adjusted for currency 2.Adjusted EBIT margin 3.Adjuste
Slide 7: H1 performance highlights
H1 performance highlights Tango revenue Ballygowan revenue Brazil brand +39.7% +34.5% contribution +12.3% The fastest growing fruit flavoured With Hint of Fruit range leading Focus on price realisation to step- carbonate brand in GB category growth in flavoured water change margin profile Global fla
Slide 8: A highly resilient category
A highly resilient category GB Grocery Mults Unit Sales growth by Super Category Y/E 25.03.23 Soft Drinks 0.2 •Affordable category, offering consumers quality, choice and value Health & Beauty 0.1 •Consumer demand remains strong in both the retail and hospitality channels Crisps & Snacks -0.4 •Soft
Slide 9: Successfully managing a challenging inflationary environment
Successfully managing a challenging inflationary environment • Strong headline pricing and broader revenue growth management Britvic volume YOY Q1 Q2 execution across all business units to offset inflation Group (3.9)% +0.6% • Price movement in GB and Ireland in Q1, and end of Q2 in France GB (2.4)%
Slide 10: Tango – the fastest growing fruit-flavoured carbonates brand
Tango – the fastest growing fruit-flavoured carbonates brand •Brand retail sales value (RSV) +56.1% YOY (category +14.7%) •RSV £84m, +£53m* •Recruited 2 million new shoppers* •Market share nearly doubled* •New sugar-free flavour innovation = 50% of brand RSV •Successful marketing platform Tango Valu
Slide 11: Leveraging the brand equity of Ballygowan
Leveraging the brand equity of Ballygowan •Total brand revenue +34.5% YOY •‘Hint of Fruit’ range achieved 18% market share in year 1 •Innovating to create great tasting, low and no calorie drinks •Production to be 100% wind powered •90% reduction in direct carbon emissions at Newcastle West •Every b
Slide 12: Rebuilding margin and growing brands in Brazil
Rebuilding margin and growing brands in Brazil •Multiple price increases in 2022 to correct margin (+290bps) •Brand contribution +12.3% •Volumes stabilised in H1 •Fruit processing business particularly impacted by crop yields Concentrates Seleção +26.2% +40.8% & inflation •More than offset by growth
Slide 13: Financial Review
Financial Review An excellent start to the year Chris Hancock Chief Strategy Officer
Slide 14: An excellent start to the year
An excellent start to the year Reported Vs. HY22 Volume 1,154.1m -1.8% Net Revenue 794.0m +7.9% Adjusted EBIT 85.3m +16.7% Adjusted EBIT Margin 10.7% +80bps Adjusted EPS 22.8p +17.5% DPS 8.2p +5.1% Adjusted Net Debt / EBITDA 2.2x - Q1 Volume / Revenue YOY Q2 Volume / Revenue YOY -3.9% / +7.4% +0.6%
Slide 15: Business Unit highlights GB
Business Unit highlights GB • Consistent revenue growth in both retail and hospitality channels • Revenue growth across both Britvic and PepsiCo brand portfolios Pepsi J20 • Strong performance in low sugar carbs and J2O, Rockstar more challenging +9.2% +20.9% • Margin benefits from phasing of A&P in
Slide 16: Business Unit highlights
Business Unit highlights Brazil Other International Volume (7.4)% Volume (1.9)% ARP +6.5% ARP +6.8% Revenue (1.4)% Revenue +4.7% Brand Contribution +12.3% Brand Contribution (13.0)% Brand Margin +290bps Brand Margin (500)bps • Impact of price increases on volume stabilising, • Robust growth in Irela
Slide 17: Cost base – investing in the business to drive growth
Cost base – investing in the business to drive growth •Full year A&P anticipated to be ahead of FY22 Reported Var to HY22 Total A&P spend 21.8 15.2% •Planned A&P saving in H1, shifted investment into H2 A&P as a % of revenue 2.7% 90bps •Salary investment to retain and recruit the best talent Non-bra
Slide 18: Smart procurement securing availability and curbing inflation
Smart procurement securing availability and curbing inflation •Supply resilience of key components secured through proactive supplier relationship management •FY23 inflation in line with low double-digit % guidance •Rolling 18 month hedging policy with >90% coverage in FY23 and >50% in FY24 •Packagi
Slide 19: Disciplined capital allocation policy
Disciplined capital allocation policy CAPEX DIVIDENDS Investment in organic growth & Progressive dividend policy innovation – 50% payout ratio STRONG UNDERLYING FCF CONVERSION DEBT M&A Maintain long-term debt leverage Value-adding M&A within 1.5x to 2.5x range RETURN EXCESS CASH TO SHAREHOLDERS 19 I
Slide 20: 2023 trading environment and modelling considerations
2023 trading environment and modelling considerations • Anticipate price/mix led revenue growth though RGM price realisation • Will continue to invest in future growth drivers - brands, supply chain, sustainability and technology • Effective tax rate 21.0% to 22.0%, Net interest cost of £22.5m to £2
Slide 21: Looking Ahead
Looking Ahead A winning growth strategy Simon Litherland CEO
Slide 22: Britvic's winning growth strategy will continue to deliver over the long-term
Britvic’s winning growth strategy will continue to deliver over the long-term STRATEGIC PRIORITIES BUILD LOCAL FLAVOUR HEALTHIER ACCESS FAVOURITES & BILLIONS PEOPLE, NEW GLOBAL PREMIUM OF WATER HEALTHIER GROWTH BRANDS OCCASIONS PLANET SPACES MARKET FOCUS GLOBALISE PREMIUM BRANDS LEAD MARKET ACCELERA
Slide 23: Pepsi – Winning in Cola
Pepsi – Winning in Cola • Continued focus on Pepsi MAX – the #1 cola variant in GB • Activating proven platforms - football, live music and taste challenge • Continued leadership in flavour innovation • Further reduction in calories with 58% less sugar in regular variant • Extending reach, growing d
Slide 24: Robinsons: evolving the squash category
Robinsons: evolving the squash category • The nation’s #1 squash brand is reinventing the category • A bold new look and new shelf layout to improve appeal and shopper impact • Family-centric activation platforms and engaging brand partnerships • Heavyweight new advertising campaign soon to be live
Slide 25: Investing in the future growth potential of Rockstar and Teisseire
Investing in the future growth potential of Rockstar and Teisseire Rockstar Teisseire • Simplified range, with new sugar-free flavours added • Contemporary brand visual identity to improve appeal and shelf standout, more consistent across markets • Dedicated Rockstar regional field sales team • Simp
Slide 26: A Stronger, More Agile Britvic: a faster-growing business
A Stronger, More Agile Britvic: a faster-growing business • An excellent start to the year, our fantastic brands are winning in a resilient category • Good momentum across all key performance indicators • Successfully managing the inflationary environment • Continuing to invest to accelerate long-te
Slide 27: Thank you
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Slide 28: Appendix
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Slide 29: Lead Market Growth in GB
Lead Market Growth in GB • Maintaining our carbonates momentum, through our leadership in great tasting low/no sugar • Flavouring billions of water occasions, Robinsons leading the migration towards concentrated soft drinks • Leveraging our dispense expertise and Aqua Libra Co to lead growth beyond
Slide 30: Accelerate and Expand in Brazil
Accelerate and Expand in Brazil Category expansion Regional expansion • Rejuvenating concentrates for the Brazilian consumer • Consolidating strength in São Paulo, Rio, MG & NE • Building our global premium portfolio • Accelerating share in under-indexed regions • Accessing new growth spaces in thro
Slide 31: Globalise Premium Brands and Improve Profitability in Western Europe
Globalise Premium Brands and Improve Profitability in Western Europe Global Premium Western Europe • Further acceleration of London Essence and Mathieu Teisseire • Building profitable local brands and accessing new, around the world higher margin growth spaces in Ireland • Building strength in Middl